SATVINDER SINGH CHADHA ,MUMBAI vs. INCOME TAX OFFICER DELHI WARD 12 (1), DELHI

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ITA 7609/DEL/2025Status: DisposedITAT Delhi23 September 2026AY 2017-20185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had dismissed the assessee's appeal against the AO's order, which made an addition of Rs. 31,81,47,710/- under Section 69A on a protective basis. It was also noted that a substantive addition of the same amount was made against Shri Ravinder Manohar Chavan. Crucially, the Tribunal observed that in the appeal filed by Shri Ravinder Manohar Chavan, the CIT(A), by an order dated 24.07.2025, had set aside the ex-parte assessment order and directed the AO to pass a fresh assessment order. In light of these material facts and in the interest of justice, the Tribunal decided to set aside both the impugned order of the CIT(A) dated 07.11.2025 and the assessment order of the AO dated 19.03.2025. The matter was restored to the file of the AO for a fresh decision in accordance with the law. All grounds of appeal were left open for adjudication. The Tribunal did not decide on the substantive issues raised by the assessee.

What were the facts?

The assessee, Satvinder Singh Chadha, is appealing an order dated 07.11.2025 by the Commissioner of Income Tax (Appeals) [CIT(A)], which upheld an assessment order dated 19.03.2025 passed by the Assessing Officer (AO) under Section 147 read with Section 144 of the Income Tax Act, 1961, for Assessment Year 2017-18. The AO made an addition of Rs. 31,81,47,710/-. The proceedings were initiated based on information that Ravinder Manohar Chavan, an ex-employee of M/s. Vikash Road Carriers Ltd. where the assessee is a director, signed documents as per the assessee's instructions. The AO's addition was made on a protective basis. The assessee's appeal to the CIT(A) was dismissed. The assessee has filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 31,81,47,710/- made under Section 69A of the Income-tax Act, 1961, on a protective basis, based on suspicion and an uncorroborated statement of an ex-employee. 2. Whether a protective assessment/addition can be sustained when the substantive addition is made in the hands of another person (Shri Ravinder Manohar Chavan) and no conclusive finding was reached regarding the ownership of the money by the assessee. 3. Whether the CIT(A) erred in not adjudicating the appeal on merits and failing to hold that the addition under Section 69A is unexplained money. 4. Whether the CIT(A) erred in confirming the addition without properly considering the assessee's evidence and explanations, thereby failing to appreciate that the assessee had discharged the onus. 5. Whether the assessment proceedings initiated under Section 147 and completed under Section 147 read with Section 144B are invalid for want of jurisdictional conditions or non-compliance with statutory procedures. 6. Whether the CIT(A) erred in confirming the validity of proceedings under Section 147 without tangible material and reasoned belief that income had escaped assessment. 7. Whether the CIT(A) erred in dismissing the appeal and confirming the protective addition without making any enquiry into procedural lapses or directing the AO to provide the ex-employee's statement for cross-examination. 8. Whether the CIT(A) erred in confirming the protective addition, which may lead to a consequential penalty under Section 271AAC(1). Assessee's Contentions: The CIT(A) erred in confirming the addition on a protective basis. The CIT(A) had previously set aside an ex-parte assessment order for AY 2017-18 in the case of Ravinder Manohar Chavan and directed the AO to pass a fresh order. Reliance was placed on the ITAT order in DCIT vs. Sh. Pankaj Jain. The addition is based on suspicion, conjecture, and an uncorroborated statement. A protective addition cannot be sustained when the substantive addition is in another's hands. The assessment proceedings are invalid. The CIT(A) failed to adjudicate on merits and consider the assessee's evidence. The CIT(A) failed to make necessary enquiries and provide material for cross-examination. The protective addition may lead to an uncalled-for penalty. Revenue's Contentions: The Departmental Representative relied on the impugned orders.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 148A,Section 148,Section 143(2),Section 142(1),Section 144B,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI

Before: SHRI VIMAL KUMAR & SHRI SANJAY AWASTHI

For Appellant: Ca Sh. Vipul Shah, Adv
For Respondent: Shri Robin Rawal, CIT. DR
Hearing: 21.09.2026Pronounced: 23.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 7609/Del/2025, A.Y. 2017-18 Satvinder Singh Chadha Vs. Income Tax officer 3201, Shikhar, Delhi Opp. Lotus Petrol Pump Lane Ward 12(1), Oshiwara, Jogeshwari West, Delhi Mumbai Maharashtra �थायीलेखासं./जीआइआरसं./PAN/GIR No: ADXPC3925G Appellant .. Respondent Appellant by : Sh. Akshay Shah, Ca Sh. Vipul Shah, Adv. Respondent by : Shri Robin Rawal, CIT. DR Date of Hearing 21.09.2026 Date of Pronouncement 23.09.2026

O R D E R PER VIMAL KUMAR, JM: The appeal filed by the Appellant/assessee is against order dated 07.11.2025 of ld. Commissioner of Income Tax (Appeals), Delhi [hereinafter referred to as “the CIT(A)”] arising out of assessment order dated 19.03.2025 of

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ld. Assessing officer/Assessment Unit (hereinafter referred to as ‘the AO’) u/s 147 r.w.s. 144 of the Act for A.Y. 2017-18.

2.

Brief facts of the case are that the appellant/assessee is a director of M/s. Vikash Road Carriers Ltd. filed return of income of Rs. 61,07,020/- on 09.12.2017. Information was received that one Ravinder Manohar Chavan was working with M/s. Vikash Road Carriers Ltd. had revealed that used to sign documents relating to opening of current accounts, cheques and bank letter heads as per the instruction by Shree Satvinder Singh Chadha, Director of M/s. Vikash Road Carriers Ltd. On basis of information proceedings u/s 148A of the Act were initiated. The assessee filed submissions on 24.03.2024. Notice u/s 148 of the act was issued to assessee on 31.03.2024. The assessee filed ITR on 29.06.2024. Notice u/s 143(2) of the Act dated 18.10.2024 was issued. Notices u/s 142(1) dated 18.10.2024, 13.11.2024 centralized communication dated 24.12.2024, show cause notice dated 14.02.2025 were issued. The assessee submitted submissions. On completion of proceedigns, Ld. AO vide letter dated 19.03.2024 made addition of Rs. 31,81,47,710/-.

2.1 Against order dated 19.03.2025 of Ld. AO, the assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 07.11.2025.

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3.

Being aggrieved, the appellant/assessee preferred present appeal on following grounds:

“1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the addition of Rs. 31,81,47,710/- made under Section 69 A of the Income-tax Act, 1961, merely on a protective basis which is based on mere suspicion, conjecture, and the uncorroborated statement of an ex- employee. 2. The CIT(A) ought to have appreciated that a protective assessment/addition cannot be sustained in the hands of the Appellant when the substantive addition is made, in the hands of Shri Ravinder Manohar Chavan, and no conclusive finding was recorded that the money actually belonged to the Appellant. 3. The protective addition confirmed by the CIT(A) is bad in law, arbitrary, and excessive, and is liable to be deleted. 4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not adjudicating the appeal on merits and failing to hold that the addition of Rs. 31,81,47,710/- u/s 69A as unexplained money, 5. The CIT(A) erred in confirming the addition without properly considering the evidence and explanations furnished by the Appellant during the assessment and appellate proceedings, thereby failing to appreciate that the Appellant had discharged the necessary onus cast upon him under the law. 6. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not holding that the entire assessment proceedings initiated u/s 147 and completed u/s 147 r.w.s. 144B of the Act are invalid, bad in law, and void ab initio, inter alia, for want of satisfaction of jurisdictional conditions and/or non-compliance with mandatory statutory procedures. 7. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the validity of the proceedings initiated u/s 147 of the Income Tax Act, 1961, which was done solely on the unverified complaint of an ex- employee and without any tangible material leading to the formation of a reasoned belief that income had escaped assessment. 8. The Ld. CIT(A) erred in dismissing the appeal and confirming the protective addition without making any enquiry whatsoever into the procedural lapses committed by the Assessing Officer or without making any enquiry whatsoever on his own and without directing the Assessing Officer to provide the Appellant

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with the copy of the ex-employee's statement and the underlying material for cross-examination and rebuttal. 9. The CIT(A) erred in confirming the protective addition, which may lead to the levy or confirmation of a consequential penalty u/s 271AAC(1) of the Act, which is uncalled for and liable to be deleted. 10. The Appellant craves leave to add, alter, amend, or substitute any or all of the above grounds of appeal before or at the time of the hearing of the appeal.” 4. Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) erred in confirming addition of Rs. 31,81,47,710/- u/s 69A on protective basis. Ld. CIT(A) vide order dated 24.07.2025 had set aside, ex parte assessment order dated 29.05.2023 for A.Y. 2017-18 in case of Ravinder Manohar Chavan and directed to AO to pass a fair assessment order freshly.

5.

Reliance was placed on order dated 30.06.2026 of ITAT in DCIT vs. Sh. Pankaj Jain.

6.

Ld. Departmental Representative relied on impugned orders.

7.

From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide impugned order dated 07.11.2025 dismissed the appeal against assessment order dated 19.03.2025 against the appellant/assessee making addition of Rs. 31,81,47,710/- u/s 69A on protective basis. Substantive addition of Rs. 31,81,47,710/- was made against sh. Ravinder Manohar Chavan.

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In appeal by Sh. Ravinder Manohar Chadha, Ld. CIT(A) vide order dated 24.07.2025 had set aside, ex parte order and directed AO to pass assessment order freshly.

8.

In view of above material facts and in interest of justice, the impugned order dated 07.11.2025 of ld. CIT(A) and 19.03.2025 of ld. AO are set aside and the matter is restored to the file of ld. AO for afresh decision in accordance with law. All grounds of appeal are left open.

9.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 23.09.2026.

Sd/- Sd/- (SANJAY AWASTHI) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:23.09.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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